Ironclad Rule for Profit in Cryptocurrency Trading: The Three-Line Resonance Trading Strategy, a Proven Logic from Fluctuation to Trend

In the cryptocurrency trading world, opportunities are never lacking; what is lacking is a practical trading strategy that is 'understandable, actionable, and resilient to volatility.' Most people fall victim to 'blindly following indicators,' 'holding positions without a stop-loss until liquidation,' and 'fully betting on market trends.' The real logic for making money lies in using simple tools to capture core signals and employing disciplined operations to control risk. Today, I will share a trading strategy of 'three-line resonance' that has been validated through bull and bear markets, covering the entire process of selecting coins, entry, risk control, and profit taking. Beginners can easily grasp it, while experienced traders can advance their skills.

1. Core of the strategy: Three-line resonance, filtering out 90% of false signals

The so-called 'three lines' refer to the trend line (direction) + signal line (timing) + volume line (momentum). Only enter when all three conditions are met; never trade on a single signal—this is the key to avoiding being harvested by market noise.

- Trend lines: Use moving averages to determine direction, do not take contrarian positions.

Focus on two moving averages: the 20-day moving average (short-term trend) + the 60-day moving average (medium-term trend). When the 20-day moving average crosses above the 60-day moving average forming a 'golden cross', and both lines are trending upwards, define it as a bullish trend, only take long positions and not short; conversely, after a 'death cross', if both lines are trending downwards, only take short positions and not long. In a ranging market, if moving averages are entangled, directly stay out of the market to avoid frequent stop-losses.

- Signal line: MACD + RSI combination, accurately capture turning points.

MACD looks for momentum shifts: a golden cross above the 0 axis is a strong bullish signal, while a golden cross below the 0 axis requires caution; when the red bars expand, the trend continues, while narrowing red bars prepare for profit-taking. RSI indicates overbought and oversold: below 30 and a MACD golden cross is a good buying opportunity; above 70 and a MACD death cross calls for decisive profit-taking and exiting. When both indicators resonate, the signal accuracy improves by 40% compared to a single indicator.

- Volume line: Trading volume verifies the truth, avoid false breakouts.

When the price rises, trading volume must increase (over 30% compared to the average of the previous 5 days), indicating strong buying pressure; if the price rises on decreasing volume, it is likely a trap. When breaking through key resistance levels, volume must explode simultaneously, otherwise it is considered a false breakout, and entry should be abandoned immediately. When the price drops on decreasing volume, the trend may continue; an increase in volume during a drop requires caution for a rebound after panic selling.

II. Three-step practical operation: From coin selection to entry, each step has iron rules.

Step 1: Coin selection filtering, only trade 'high certainty targets'.

- Prioritize mainstream coins (BTC, ETH) or leading coins with strong narratives in sectors (such as L2, RWA, AI concept leading coins); altcoins should only be participated in with small positions when the trend is clear.

- Exclude targets with daily trading volume below 50 million USDT, as insufficient liquidity can lead to slippage losses.

- On-chain data assistance: Choose projects with a growing number of independent addresses and stable increases in TVL, avoiding coins with stagnant development and large sell-offs.

Step 2: Timing for entry, wait for 'three-line resonance' before taking action.

- Long entry conditions: 20-day + 60-day moving averages golden cross upwards (trend line) + MACD golden cross above the 0 axis (signal line) + trading volume increasing by over 30% (volume line), and the price stabilizes above the nearest resistance level.

- Short entry conditions: 20-day + 60-day moving averages death cross downwards (trend line) + MACD death cross below the 0 axis (signal line) + trading volume increasing by over 30% (volume line), and the price breaks below the nearest support level.

- Entry action: Build positions in two batches, the first batch should account for 10%-15% of total capital, increase by another 10% after confirming the price does not retest key levels, with a total position not exceeding 25%.

Step 3: Risk control is paramount, do not hesitate on stop-loss and profit-taking.

- Stop-loss settings: Use 'structural stop-loss', with the long stop-loss set at the nearest support level below the entry point (or the 20-day moving average), and the short stop-loss set at the nearest resistance level above the entry point (or the 20-day moving average). Strictly control individual losses to be 2%-3% of total capital.

- Profit-taking strategy: Combine partial profit-taking with trailing stop-loss. Sell 1/3 of the position at the first target (30%-40% increase), sell another 1/3 at the second target (60%-80% increase), and hold the remaining position with a 'trailing stop-loss' (if the price rises by 10%, move the stop-loss up by 5%), until a MACD death cross occurs or the price falls below the 20-day moving average for liquidation.

- Special situations: If sudden negative news causes the moving average to turn, there is no need to wait for the profit-taking point; exit directly according to stop-loss rules to preserve already gained profits.

III. Adaptation to different market conditions: Flexible adjustments for ranging and trending markets.

Ranging market (moving averages entangled, repeated highs and lows).

- Core strategy: Range trading, rely on previous highs and lows to draw boxes, buy low at the lower edge (support level) + RSI below 30, and sell high at the upper edge (resistance level) + RSI above 70.

- Taboo: Do not use leverage, reduce position size by half (single position not exceeding 15%), to avoid being caught in failed breakouts.

Trending market (moving averages in bullish/bearish arrangement, one-sided market).

- Core strategy: Trend following, use 'golden cross' (50-day moving average crossing above the 200-day moving average) to confirm strong trends, increase position intervals to 15%-20%, and change trailing stop-loss to 'liquidate on breaking below the 60-day moving average' to maximize trend profits.

- Taboo: Frequent profit-taking and exiting, do not guess tops and bottoms, just go with the trend.

IV. Iron rules of strategy: Avoid these pitfalls to double your winning rate.

1. Do not chase isolated signals: If any of the three lines are missing, do not trade, even if the market seems booming, remain firm and observe.

2. Do not over-invest or use leverage: Total position should never exceed 70%, use 5-10 times low leverage in trending markets, and resolutely avoid leverage in ranging markets.

3. Do not hold positions or act emotionally: Stop-loss is the 'lifeline' of trading; exit immediately if the stop-loss level is breached, rejecting the mindset of 'let's wait and see if it rebounds'.

4. Do not be greedy and seek perfection: Trade at most 2-3 targets per day, focus on opportunities that align with your strategy, and abandon vague 'suspected signals'.

The essence of trading in the cryptocurrency market is to use rules to counter human greed and fear. This set of 'three-line resonance strategy' does not involve complex formulas; the core lies in 'clear signals, decisive execution, and strict risk control'. Beginners can practice with a simulated account to familiarize themselves with the logic of moving averages, MACD, and trading volume; experienced traders can optimize parameters based on their own experiences (such as changing the 20-day moving average to a 15-day moving average), but should never deviate from the core logic of 'trend + signal + volume'.

Remember, the key to making money in the cryptocurrency market is not to 'seize every opportunity', but to 'seize every opportunity that you can understand'. When you can consistently execute this strategy, resist temptation, and strictly adhere to discipline, you can continue to profit in a volatile market, transforming from 'foolishly chasing highs and lows' to 'strategically managing trades'—the next market wave will be the best opportunity for you to validate this strategy.